Will home-car loans become cheaper in October? RBI governor's answer was received

Shaktikanta Das / Will home-car loans become cheaper in October? RBI governor's answer was received

Shaktikanta Das - Will home-car loans become cheaper in October? RBI governor's answer was received

Shaktikanta Das: There has been a long-standing expectation of a reduction in the EMI of home loans, car loans and other types of loans. The Reserve Bank of India (RBI) has not changed the repo rate for the last almost two years, leaving the hopes of loans getting cheaper unfulfilled. However, now that inflation is under control, many are hoping for a cut in interest rates. The Monetary Policy Committee (MPC) is scheduled to meet between October 7 and 9 to consider this, and a decision will be taken on a possible cut in the policy interest rate in this meeting.

RBI Governor's statement

Reserve Bank of India Governor Shaktikanta Das recently commented on this issue. He said that any cut in the policy interest rate will depend on the long-term rate of inflation, not on monthly figures. Das said, "The question is not that in the current context, like in July, inflation came down to around 3.6 percent. This is the revised figure. In August it has come down to 3.7 percent. This shows what is the state of inflation right now. Now we have to see what is the outlook on inflation for the next six months, next one year.”

He pointed out that the monthly pace of inflation is important, but it is also necessary to pay attention to the long-term trend. Das also said that the upcoming inflation growth rate will be seen positively and the decision will be taken on this basis.

Comment on the possibility of cut

When the governor was asked whether a policy rate cut would be actively considered in the October meeting, he did not give a direct answer. Das said, “We will discuss in the MPC and take a decision, but as far as the dynamics of growth and inflation are concerned, I would like to say two things. One, the growth momentum remains good, India's growth story is intact. As far as the inflation outlook is concerned, we have to look at the monthly pace and a decision will be taken based on that.”

Focus on rupee stability

Das also mentioned that the rupee has established itself as one of the least volatile currencies globally since the beginning of 2023. He said, "Our declared policy is to prevent excessive volatility of the rupee. Keeping the rupee stable instills confidence in the market, investors and the economy." Das also said that the RBI is committed to maintaining financial stability and will continue to take necessary steps to ensure it. Future direction Given the current circumstances, experts say that the RBI may also decide to cut interest rates this time. However, it is clear from the comments of Governor Das that any decision will be based on long-term inflation trends and will not be influenced by monthly data. For now, it remains to be seen what decision will be taken in the upcoming MPC meeting. If interest rates are cut, it can bring down the EMI of the loan and provide relief to the common people.